PORTLAND – Business owner Doug Newman wants a simple answer to a simple question: What’s an independent contractor?

Turns out, Newman, owner of Newman Concrete Services in Richmond, won’t get the answer he wants, at least not from the state of Maine.

Three state agencies define independent contractor differently: The Maine Revenue Service has one definition, the Workers’ Compensation Board has another and the Department of Labor, a third.

For Newman that means more questions. How should his workers be classified? Does he file W2 or 1099 forms? What about unemployment tax and workers’ compensation insurance?

“It’s created uncertainly, and the definitions don’t match how we do business,” he said.

Newman is one of many businesspeople appealing to Gov.-elect Paul LePage, who on Dec. 1 launched a program to solicit feedback from Maine businesses on how to cut red tape and reform regulations.

Since then, letters describing business problems and suggesting solutions have poured into the governor-elect’s office from companies in multiple industries.

“We are getting them from e-mail, and I got a small stack of handwritten notes yesterday,” said Dan Demeritt, LePage’s communications director. “Some bigger businesses (talk) about permitting and processing. Smaller businesses are concerned about health care.”

The LePage transition team declined to provide the Portland Press Herald/Maine Sunday Telegram with copies of the letters, but did provide a summary. And chambers of commerce, which helped LePage gather feedback, gave names of people who commented.

“Just give me a clear set of rules and apply it evenly, and we can deal with it,” said Newman, reached this week by phone.

The state of Maine publishes a two-page pamphlet called “Independent Contractors in Maine,” which is available online and is intended to clarify Newman’s uncertainty.

But the document describes what Newman says is the problem.

“The guidelines of each agency are too detailed for one brochure,” the document reads. “Employers should ask each agency if they consider workers to be employees or independent contractors.”

Executives at Sunday River and Sugarloaf ski mountains, owned by Boyne Resorts of Michigan, also wrote LePage.

Vice President of Development Mark Hall said he is looking for streamlined approval from the Department of Environmental Protection for smaller projects, such as building chairlift houses.

Maine’s Site Location of Development law requires ski resorts to file for such modifications, a process Hall said can take months.

Hall appreciates that site laws protect the environment, but said review of minor projects on massive ski areas is overkill.

“We do projects that should be subject to site review, but we do dozens of little projects that shouldn’t,” he said. “The DEP is spending an inordinate amount of time reviewing overly complex applications for relatively minor projects.”

Andrew Fisk, DEP’s director of the Bureau of Land and Water Quality, said there are reasons behind the regulation, but that he planned to work with the new administration.

As for the ski resorts, Fisk said they are always growing and site plan reviews ensure local streams, bird communities and fragile mountain areas remain protected.

He added that there are different levels of review and that small projects are considered faster.

“It’s not just review for review’s sake,” he said. “The system has to be able to have a check.”

Several of the complaints regarded DEP regulations.

Peter Daigle, chief operating officer of Lafayette Hotels, which owns 23 properties in Maine, told LePage the DEP “stonewalled” him for nearly 10 years on an application to renovate the Oceanfront Resort in Wells Beach.

“We went through the whole process with the DEP. They kept coming back asking for more engineers’ reports and marine scientists’ reports,” said Daigle.

Daigle said he accumulated a stack of paperwork two feet thick and spent $150,000 from 1999 to 2008, when the project was denied.

“It’s one thing to protect a pristine environment, but to forbid a building owner from adding a story or an elevator? It makes no sense,” he said.

Fisk said Daigle’s application for beachfront renovation took years because Daigle kept changing the plans and was slow to provide appeal information.

His final request — a third-floor addition — was considered a major expansion requiring the building be placed on stilts, or moved, to meet existing land use-laws, said Fisk.

“It’s not as clear as just, ‘We jerked you around for 10 years,’” said Fisk, adding that there are important issues to consider when reviewing changes to oceanside buildings, such as flooding potential.

Fisk said DEP recently shortened processing times. The agency now refunds processing fees if decisions on minor projects take longer than 30 days, and the agency guarantees site law decisions in 150 days, down from 180 last year. Processing times can stretch longer when applications are incomplete.

National Semiconductor, which is headquartered in California but has offices in South Portland, sent a letter to LePage about a law passed in 2004 requiring nonresidents to pay income tax if they work more than 10 days (even nonconsecutive days) in the state. Prior to 2004, the cutoff was 20 days.

That discourages companies from bringing out-of-state employees to Maine on a temporary basis and encourages firms to hold events, such as training, in states with more liberal income tax laws, said Anne Gauthier, National Semiconductor’s public affairs manager.

Additionally, nonresident employees don’t want to come because they might have to file taxes in Maine.

“It’s cumbersome for tracking and a deterrent for out-of-state businesses to send employees to the state And the employee has to file,” said Gauthier.

National Semiconductor employs many staffers in Texas, a state with no income tax.

Business owners also mentioned Maine’s Land Use Regulation Commission, which governs some 10.5 million acres of unorganized state land.

In 2006, Matthew Polstein applied to LURC to rezone land for Ktaadn Resorts, a new development with an 80-room hotel and rental homes on 1,450 acres of land near Millinocket Lake.

Polstein said the commission approved the rezoning, praising its lack of sprawl and balance of development and environmental space.

But when Polstein moved forward with permitting, he found LURC’s own requirements prohibited aspects of the plan that the commissioners praised.

LURC requires roads be set back from commercial development — even private roads. But the road Polstein proposed, which would run across his property to the door of his hotel, did not meet the standard.

So Polstein changed his plans, adding driveways — technically not “roads” — that connect the main road to the hotel.

“We had to design (more) roads that created sprawl and redundancy,” Polstein said.

Polstein thinks LURC needs flexibility, particularly in dealing with private land.

“I am forced to develop my structures and roads (as) if all my guests were turning into my business directly off Route 1,” Polstein wrote to LePage.

LURC director Catherine Carroll, who has worked with Polstein for years, said LURC’s commercial rules are less flexible than residential rules, largely because the agency has less experience dealing with commercial developers.

Carroll said Polstein “makes a good argument.”

“Not all of (the rules) make perfect sense, especially the rules for non-residential development,” she said. “It doesn’t hurt to relook at the commercial development rules to see what we can do to massage them to enable a developer to reach his goals, as well as the regulators’ (goals).”

Carroll added the she would like LURC to move toward “prospective zoning,” where the agency works proactively with property owners to identify areas suitable for development.

Prospective zoning, which the agency has done in the Rangeley Lakes area, makes permitting easier and more predictable.

But Carroll said LURC, with 25 staffers and a $2 million budget, has limited resources.

“It is a costly task. It takes money and time,” she said.

Fisk, of the DEP, said he is also open to change. And he is eager to work with the new governor.

“I welcome getting an eye on consistency, timeliness and clear decision making. For the governor to say, ‘New projects that create jobs should get a permit in 90 days — OK, we will do our best to make that happen.’“

Staff Writer Jonathan Hemmerdinger can be contacted at 791-6316 or at:

[email protected]


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